As Starlink challenges telecom operators' pricing power, AT&T (T.US) sells its Mexico business for $2 billion, shifting focus to AI connectivity demand.

According to Zhihui Finance APP, one of the three major US telecom operators, AT&T (T.US), announced on Tuesday (Eastern Time) that it will sell its Mexican business, which serves about 24.7 million users, for $2 billion in cash to a consortium equally owned by Televisa and Fintech. The deal is expected to be completed in the first quarter of 2027, allowing AT&T to further focus on the demand for high-speed connections powered by fiber, 5G, and AI in the US market.

Data shows that AT&T’s Mexican operations are projected to have an operating margin of just about 1.6% in 2025, and the sale reflects a strategic focus of capital on core markets. For the buyers, they are expected to combine Televisa’s fixed broadband with mobile services to improve user retention and dilute customer acquisition costs by offering bundled packages. The value of the same asset to different operators ultimately depends on the ability to create network and client synergies.

Prior to AT&T’s latest moves, SpaceX had proposed an ambitious plan to acquire the nationwide 800MHz low-frequency spectrum and accelerate the integration of satellite and terrestrial networks across the US, which has already dealt a heavy blow to telecom stocks. On October 9, AT&T, Verizon, and T-Mobile fell by 9.8%, 8.7%, and 13.3% respectively. The market is currently reassessing the long-term pricing power and cash flow certainty of traditional telecom operators.

Currently, AT&T is focusing its capital on developing US-based fiber and 5G integrated networks to meet the high-capacity, low-latency, and reliable connectivity needs arising from AI applications. The focus is on capital centralization through the sale of overseas assets and leveraging fiber and 5G integrated networks to meet AI-driven connectivity needs. The integrated networks AT&T refers to mainly serve as high-speed connections among users, enterprises, and the cloud, and also include the convergence of fixed broadband and mobile services in terms of packages, customer management, and user experience. The fiber and 5G integrated networks combine fixed fiber broadband and high-speed 5G mobile networks: fiber serves backbone transmissions, base station backhaul, and home broadband, while 5G handles wireless access for mobile devices.

Reportedly, SpaceX (SPCX.US), founded and led by Elon Musk and valued at over $2 trillion as a leader in “AI + space exploration”, plans a significant acquisition of the US-wide 800MHz spectrum portfolio owned by Grain Management, covering up to 14MHz paired spectrum, moving a key step toward becoming a comprehensive mobile communications operator. The value of the planned acquisition, from a technical standpoint, lies in promoting a more integrated Starlink satellite internet and ground network coverage system. Starlink’s satellite network specializes in covering remote areas and terrestrial blind spots, while the new low-frequency spectrum will help deploy ground systems to improve signal penetration and indoor coverage in buildings and complex obstructed environments. In other words, the satellite network provides broad coverage to supplement ground blind spots, while the low-frequency terrestrial network enhances connectivity indoors and in complicated shadowed areas, making them complementary.

AT&T further focuses on the US market, sells Mexican business to Televisa and Fintech for $2 billion

US telecom operator AT&T said on Tuesday that it has agreed to sell its Mexican business for $2 billion in cash to a consortium formed by Mexico's Televisa Group and Fintech Holdings. The company continues to focus on its domestic fiber and 5G networks while increasing its commitment to meet the high-speed AI connectivity demand.

AT&T said that the deal is expected to close in the first quarter of 2027, pending approval from Mexican regulators. According to Televisa, as Mexico’s second-largest mobile operator, the business will have approximately 24.7 million users as of December 2025.

Televisa said the purchase price is subject to adjustments, with additional contractual rights and contingent benefits; the deal will be financed with existing cash and non-recourse secured debt.

Televisa and Fintech Holdings will each own 50% of the acquisition consortium.

Televisa is Mexico’s largest broadcasting group and the world’s largest producer of Spanish-language content. Fintech is a private investment and holding company owned by Mexican billionaire David Martinez.

AT&T chairman and CEO John Stankey said in a statement, “We have been clear in our steadfast belief that the future of AI will run on integrated networks with dense fiber assets. This move enables AT&T’s Mexican business to participate in this evolution.”

After the announcement on Tuesday, Televisa’s shares on the New York Stock Exchange rose 5.3% in after-hours trading; AT&T shares rose 1.6% to close at $22.85.

This deal ends AT&T’s expansion in Mexico. This process began with the acquisition of Iusacell in 2014 and included the 2015 acquisition of Nextel Mexico, with the goal of challenging Telcel, owned by América Móvil, which dominates the Mexican wireless market.

Televisa said that AT&T’s Mexican business will have revenues of 85.4 billion pesos ($4.65 billion) and operating profit of 1.4 billion pesos ($76.3 million) in 2025.

Prior to AT&T’s sale of its Mexican business, Telefónica’s Movistar had already withdrawn from the local market. In April this year, Movistar sold its Mexican business for $450 million to a US-led consortium, shifting its focus back to core European markets.

Starlink challenges pricing power, while fiber retains capacity and cash flow

The major challenge posed by Starlink-led satellite internet forces is the extension from coverage in remote areas to competition in comprehensive communications packages. Wall Street financial institution William Blair expects that Starlink could bundle broadband, mobile services, and even Grok, escalating competition to the customer access point and increasing average revenue per user. J.P. Morgan’s analyst team believes that matching the experience of incumbent operators still requires terrestrial network construction, with capital and deployment time limiting short-term impacts. Both analyses indicate that share prices can price in competitive pressure in advance, while profit erosion depends on network delivery and customer migration.

By integrating its existing satellite capacity, SpaceX is upgrading its capability from providing “occasional emergency connectivity” to “daily-use mobile services”. Grain’s official announcement positions the deal as an integration of terrestrial and space connectivity; meanwhile, the FCC has approved SpaceX to deploy 15,000 new direct-to-device satellites, expanding capacity for its mobile business. From an investment perspective, broader coverage scenarios are expected to enable Starlink to grow from a supplementary service provider into a competitor for primary subscribers, home broadband, and enterprise communications budgets. The core logic underpinning the bullish outlook on SpaceX by Goldman Sachs, J.P. Morgan, Citi, and TD Cowen is that near-term revenues are driven by leasing terrestrial AI computing power, while long-term growth potential comes from expanding Starlink satellite connections, frequent launches, and integrated space-based AI data centers and applications.

From a network perspective, wide coverage does not equate to sustained capacity in densely populated areas, as satellite networks are still constrained by spectrum resources, building obstructions, and the need for terrestrial coordination. Multimodal AI and real-time interactivity increase the demand for stable connectivity, uplink capacity, and low latency, further enhancing the value of fiber and 5G integration. On October 6, major US asset manager BlackRock’s GIP and CPP Investments announced their participation in the AT&T fiber joint venture, emphasizing the demand for high-capacity connectivity and long-term digitalization opportunities, demonstrating that long-term investors still recognize the value of investing in traditional terrestrial telecom networks.

Penn Mutual Asset Management noted on October 12 that telecom giants are major issuers of investment-grade bonds, and that new well-funded competitors should also attract the attention of bondholders. It is therefore clear that the industry’s key valuation question is whether the new round of fierce competition initiated by Starlink forces operators to both cut prices and increase capital spending, thus compressing the free cash flow they need for debt servicing and dividends. AT&T’s focus on core networks is aimed at improving capital efficiency and enhancing sustained cash creation capability.